Rajiv Biswas, managing director of IHS Markit, said that India's July Purchasing Managers' Index numbers are encouraging after the data, compiled by the London-based global information provider, showed that India’s factory activity accelerated to 52.5 from 52.1 in June.

“What we have been seeing in the Indian economic data in the earlier part of this year is weakness, but the July manufacturing PMI numbers are encouraging because they have shown a healthy uptake and signal that the momentum is improving in the manufacturing sector,” said Biswas.

“One of the weaker points in the survey was that capital goods went into contraction territory. So it was a bit of mix picture in the survey results,” he added.

Speaking about crude oil prices, Biswas said, “The Brent crude price, around 65 per barrel, is very good news for India. It is a key input cost for India, major import. So this is very helpful if you look at the inflation outlook."

Further, he added, “It is helpful that the monsoon is positive, India still has a very large rural economy, and agriculture plays a big role in the overall gross domestic product (GDP). So good monsoon will be also very helpful not only for agriculture output but also because agriculture is a very significant input in the manufacturing sector."